‘Shadow’ supply of 2.1 million homes potentially looms
This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.
A supply of 2.1 million homes poised for foreclosure or delinquency potentially looms over the nation’s housing market, according to data released Monday.
This ‘shadow inventory’ of residential real estate -- in which the property is either in foreclosure, has a loan 90 days past due or has been taken back by a lender and is not listed for sale -- stood at an eight-month supply at the end of August, according to the Santa Ana mortgage research firm CoreLogic, which released the data. That was an increase from 1.9 million, a five-month supply, a year earlier.
The total number of U.S. properties listed for sale at the end of August plus the unlisted shadow inventory was 6.3 million, representing a 23-month supply of homes, according to CoreLogic, more than three times the amount considered healthy by economists.
‘The weak demand for housing is significantly increasing the risk of further price declines in the housing market,’ CoreLogic chief economist Mark Fleming said. ‘This is being exacerbated by a significant and growing shadow inventory that is likely to persist for some time.’
But whether, and when, those properties will hit the market remains unclear. Some big lenders have put foreclosure moratoriums in place after concerns over foreclosure practices emerged in October and November. The Obama administration and local governments also continue to push efforts to modify the loans of troubled borrowers. How those efforts will play out remains to be seen.
-- Alejandro Lazo